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How many of those are there because of mental illness or addiction? To help them, they first have to want to be helped. Otherwise good intentions go for naught. I know of a couple cases like that, they know how to game the system but have no intention of changing.Originally Posted by Jim Koepke
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Maybe the best way to start is to start with those who are willing to help themselves, i.e. those who do have jobs but are shut out of the housing market by high rents or other factors.
Maybe learning how the system is gamed can be turned around to shutting down the game.
jtk
"A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty."
- Sir Winston Churchill (1874-1965)
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That is a very important concept that most people don't understand. The stock market is driven by expected corporate profits. If unemployment goes up, companies don't have to pay high wages; so their profits go up as does the stock market. The economy has gotten worse, but the market is up.
The recent tax cut improved profits so the market went up, even though it badly damaged the economy.
It is perverse, but that's the way it is.
To answer the OP's question, it depends on what happens.
If corona goes away when the weather improves, the market will recover.
If 150,000,000 people get it, 30,000,000 are hospitalized, and 4,500,000 die; then we will all be in the crapper.
I suspect the truth will be closer to the first possibility, but who knows.
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The way things are going I think we will have a recession. Airlines are already drastically cutting expenses and asking employees to take voluntary leave. Who is going to want to go to any tourist destinations until this blows over? Just the fact that all NCAA tournaments are going without fans means probably means at least one hundred million in losses for the host cities.
If things get really bad I wonder if my employer could even survive a total shutdown of society for several weeks. We produce a daily product that we may not have the staff to produce and deliver, plus we may not be allowed to make deliveries.
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By some accounts we are already in a recession.
From Wikipedia:
Hopefully it will not be a long lasting disruption.In the United States, it is defined as "a significant decline in economic activity spread across the market, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales".[3] In the United Kingdom, it is defined as a negative economic growth for two consecutive quarters.
jtk
Last edited by Jim Koepke; 03-12-2020 at 1:16 AM. Reason: t
"A pessimist sees the difficulty in every opportunity; an optimist sees the opportunity in every difficulty."
- Sir Winston Churchill (1874-1965)
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If the United State simply shuts down for six weeks or more like China we might have a depression instead of just a recession. Untold number of jobs would be lost and many businesses, especially small businesses, won't be able to survive being shut down for weeks with no revenue.
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10 characters
With universities going into uber safety mode and going to on-line classes, banning spectators for March madness and the NBA cancelling the season, when will it start affecting retail and factory workers? I am an optimist, but I don't see us getting out of this without a recession or worse unless the virus dies out quickly. Beginning to wonder if this might be intentional on China's part. They can certainly waste part of their 1.4 billion population to achieve some crazy economic goal. Nope, that doesn't make sense as we are their biggest market for products. Just thinking aloud.
NOW you tell me...
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I went into the BORG to buy a dimmer switch yesterday afternoon, and the clerk said it was the biggest purchase she'd seen all day. Her: "It's a touch screen." Me: "No, YOU touch it." :^)
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Speaking as an active trader and one who has been out of the market since the end of February I know there will be opportunity in the future once the dust settles. Now when that time is I have no idea but right now cash is king!
There will definitely be a negative impact on upcoming earnings reports but that means those padded numbers will be easier to beat down the road. If society completely collapses well then the least of our worries is the stock market.
During the this Bull market people were continuously rewarded when they bought the dip... Buying the dip conditioned many and now that "buying the dip" is not working many are getting taken to the tool shed. Highly leveraged traders are getting margin calls and blowing up entire accounts on these kind of meltdowns.
Hindsight always makes someone looks like a genius just wait it out and the market will come back sooner or later. For chuckles look at the past election years and there has been a consistent trend of a disease/outbreak that happens or should I say gets media attention. Coincidence???
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If you've got a lot of money in taxable (because you can only put so much into a 401k every year) the tax on the private investor cashing out even now would be prohibitive. Holding on through even a 50% drop is IMO the best option. It worked in 2008+ when the markets were in much worse shape, and it should work now. As I mentioned before, the people who sold when the market tanked back then were the ones who really got hurt. All you need is enough liquidity to last it out.
FWIW, stocks are on sale by 25% or so right now (what time is it?) so there's that.
But only a maniac buys on margin. Those people should try Vegas, it's a bit more controllable. :^)
Last edited by Doug Dawson; 03-12-2020 at 4:04 PM.
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Which is fine by me, I have at least 20 years before I can retire anyway (assuming that's actually ever a possibilty) so while I (in theory) took over a $30,000 loss (not counting 401k) since the start of the turn down, I don't really care that much as I was planning on holding for another 20 years anyway.
~mike
happy in my mud hut
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Take this for the simpleton's logic that it is, but the financial crisis of 2008 was years, maybe decades in the making, and it took years and massive government intervention to resolve the root problems.
This virus crisis came out of nowhere, suddenly. I'm hoping it will resolve as suddenly as it appeared, and that all the temporary disruption and damage will be just that, temporary. Hopefully the same will go for the oil standoff.
I'm taking some comfort in the fact that the virus spread looks to have slowed in both China and South Korea. I heard one scientist interviewee say something to the effect that viruses like this have a tendency to mutate as they spread, in a way that progressively weakens the virus. Optimistic thinking here, but maybe that means as it spreads the virus also loses it's legs, and perhaps that's what we're seeing in China and South Korea. And hopefully soon in Italy, then everywhere else.
Anyway, I hope it burns itself out and we can resume normal life and learn some lessons in preparation for the future.
If the scenario I'm describing is what happens, then I would expect some inflection point where the stock market skyrockets. In investing, I think it's natural to want cash out to avoid the downside momentum and the pain that goes with it. However, it's equally important to participate in the upward momentum and not be stuck on the sidelines.
$.02 from a simpleton.
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The 2008 crisis was instigated largely by widespread fraud in a newly deregulated market that was not fully understood by the controlling entities, resulting in an implosion of the credit system. The current crisis (if you can call it that) seems to be the result of an understandable self-defensive panic mechanism on the part of the general public, derailing outward-facing purchases (travel, tourism, going out, etc.) Yes people are getting sick, and yes it's an issue, and yes we don't want it to spread. Maybe somebody can tell me which is the _fundamentally_ more serious problem, because I don't know.
Over long history, as you well know, but speaking generally, nobody really knows when to get out and get in, and studies have shown that slight errors in timing either way can be hugely detrimental, so it's best just to get in and stay in. One thing that has proven true over long time frames, is that that's where the real payoff is.If the scenario I'm describing is what happens, then I would expect some inflection point where the stock market skyrockets. In investing, I think it's natural to want cash out to avoid the downside momentum and the pain that goes with it. However, it's equally important to participate in the upward momentum and not be stuck on the sidelines.
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Last edited by Doug Dawson; 03-12-2020 at 7:13 PM.
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I'm hoping I can get all of the remaining materials for my basement remodel before retailers like Home Depot potentially start to shut down. I was at a Menards today and the store had a reasonable number of customers still. It was a Menards I had not shopped at in months so I don't know if the customer count was normal or not.
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